Still, a draft proposal to modify
the nonlawyer ownership rule to be similar to the D.C. program was released for public comment.
Not exact matches
Because LegalZoom has
nonlawyer ownership, under the ABA Model
Rules it can not purport to be a law firm or practice law in the U.S..
In 2011, J&M brought litigation against bar authorities in New York, New Jersey and Connecticut requesting that the enforcement of the «antiquated» ethical
rule that restricts
nonlawyer ownership of law firms be enjoined.
The debates in the U.S. go on: Should ethics
rules blocking
nonlawyer ownership of law firms be lifted?
In 1983 and again from 1999 to 2000, the ABA considered revising Model
Rule 5.4 in order to allow for
nonlawyer ownership and multidisciplinary practices in some form, but in each case the House of Delegates declined to make any changes.
However, the California
rules have the effect of prohibiting
nonlawyer ownership and multidisciplinary practices in the same manner as Model
Rule 5.4).
Just this: the regulations that restrict
nonlawyer ownership and control of law firms combined with
rules on the unauthorized practice of law.
The Commission
ruled out the D.C. approach in favor of a «narrower,» more restrictive approach, which was to require not only that the firm be engaged in legal practice only (not in combination with non-legal services) and that the
nonlawyer provide services to assist the firm in providing legal services (again, no passive investment), but also imposing (i) a cap on
nonlawyer ownership and (ii) a fit to own test on the
nonlawyers.
[42](Later, on August 19, 2013, the ABA Standing Committee on Ethics and Professional Responsibility issued Formal Opinion 464, which clarifies that a lawyer subject to Model
Rule 5.4 may share fees with a law firm practicing in a jurisdiction that permits
nonlawyer ownership, even if those fees might be distributed to a
nonlawyer, provided that there is no interference with the lawyer's independent professional judgment).
In the United States this complete bar to
nonlawyer ownership has been codified by the American Bar Association as paragraph (d) of
Rule 5.4 of the Model
Rules of Professional Conduct and has been adopted in one form or another in all U.S. jurisdictions, [1][2] except the District of Columbia.
[3] However, D.C.'s
rule is narrowly tailored to allow equity
ownership only by those
nonlawyer partners who actively assist the firm's lawyers in providing legal services, and does not allow for the sale of
ownership shares to mere passive
nonlawyer investors.
The U.K. had a similar
rule barring
nonlawyer ownership, but under reforms implemented by the Legal Services Act of 2007 law firms have been able to take on a limited number of non-lawyer partners and lawyers have been allowed to enter into a wide variety of business relationships with non-lawyers and non-lawyer owned businesses.